Supreme Court directs disbursal of nearly Rs.14 crore to Odisha private medical colleges that accommodated relocated MBBS students after derecognition of Sardar Rajas Medical College.
Supreme Court Directs Release Of ₹14 Crore
The Supreme Court has directed the release of about ₹14 crore towards dues payable to three private medical colleges in Odisha.
These colleges had accommodated MBBS students who were shifted from Sardar Rajas Medical College, Hospital and Research Centre (SRMCH) after the institution lost recognition.
A Bench of Justice Vikram Nath and Justice Sandeep Mehta delivered the judgment on May 14, 2026 in Soumya Ranjan Panda & Ors. v. Subhalaxmi Dash & Ors.
Justice Sandeep Mehta authored the judgment.
The Court held that SRMCH and Selvam Educational and Charitable Trust, which managed the college, must bear the primary financial burden arising from the relocation.
Appeals Arose From Orissa High Court Orders
The case arose from orders passed by the Orissa High Court in November and December 2015.
Those orders concerned the relocation of students from SRMCH, Jaring, Kalahandi, Odisha.
During the Supreme Court proceedings, the dispute narrowed down to the financial claims raised by three private medical colleges.
The colleges were:
Kalinga Institute of Medical Sciences (KIMS), Institute of Medical Sciences & SUM Hospital, and Hi-Tech Medical College & Hospital.
These colleges had accommodated the transferred students under judicial directions.
Background Of The Relocation Dispute
The dispute began after inspections at SRMCH by the Medical Council of India, now the National Medical Commission.
The inspections found serious deficiencies in infrastructure, faculty, and regulatory compliance.
These deficiencies related to the academic sessions 2013-14 and 2014-15.
As a result, the authorities denied renewal of recognition to SRMCH.
This placed the academic future of already admitted MBBS students at risk.
Therefore, the Orissa High Court initially directed relocation of students to recognised medical colleges in Odisha.
Later, the Supreme Court passed interim orders to protect the students from losing an academic year.
It also permitted relocation through a State-supervised counselling process.
122 Students Shifted To Three Colleges
A total of 124 students were affected by the relocation process.
Out of them, 122 students secured admission in the three transferee colleges.
KIMS accommodated 41 students.
IMS & SUM Hospital also accommodated 41 students.
Hi-Tech Medical College accommodated 40 students.
The transferee colleges later claimed that they had taught the students and paid stipends for several years.
However, they said they received only Government-rate fees of about ₹30,000 per year under interim court orders.
According to them, this amount was far below the fee structure applicable in private medical colleges.
Students Opposed Additional Fee Liability
Senior Advocate Pratap Venugopal, appearing for the transferred students, argued that the students had secured admission to SRMCH through a valid process.
He submitted that they had to relocate for no fault of their own.
He also argued that the students had already paid fees at Government rates under interim orders.
According to the students, they had completed their courses after facing severe uncertainty and hardship.
Selvam Trust Disputed Liability
Senior Advocate V. Giri, appearing for Selvam Trust, argued that findings on deficiencies in SRMCH were still under challenge before competent forums.
He submitted that courts could not conclusively fix liability on the Trust without deciding those disputes.
The Trust also argued that students ultimately received education in recognised institutions.
Therefore, according to the Trust, the Court should not impose the entire financial burden on it.
NMC Argued Against Automatic Use Of Bank Guarantee
Senior Advocate Gaurav Sharma, appearing for the Medical Council of India/National Medical Commission, submitted that fee liability should depend on quota classification.
He argued that the Court should distinguish between Government quota seats and management quota seats.
He also submitted that the ₹10 crore bank guarantee furnished by Selvam Trust should not automatically go towards dues of private colleges.
Court Says Students Cannot Keep Subsidised Fee Benefit
The Supreme Court found no material to show that Government quota seats were available in the transferee colleges.
Therefore, it held that the relocated students must be treated as students accommodated against private or management quota seats.
The Court also noted that SRMCH had failed to maintain the required standards.
It said the deficiencies had already stood affirmed after dismissal of the institution’s writ petition challenging denial of renewal of recognition.
The Bench observed that SRMCH’s failure had placed students in “a very tumultuous and volatile situation”.
However, the Court also said that interim protection could not become a permanent fee benefit.
Justice Mehta noted that students who entered private colleges could not continue to pay Government-rate fees forever.
The Court held that such a benefit would amount to unjust enrichment.
It observed that neither students could receive an undue advantage nor SRMCH/Selvam Trust could benefit from its own wrong.
Court Applies Principle Against Benefiting From Own Wrong
The Supreme Court relied on the legal maxim Commodum ex injuria sua nemo habere debet.
The maxim means that no one should gain from their own wrong.
Applying this principle, the Court held that SRMCH and Selvam Trust must carry the primary burden.
The Bench found that the institution’s own failures had created the relocation crisis.
₹14 Crore To Be Distributed Equally
The Supreme Court noted that Selvam Trust had deposited ₹2 crore before the Court.
It had also furnished bank guarantees of about ₹10 crore before the MCI/NMC.
With accrued interest, the total available amount came to about ₹14 crore.
The Court directed that this amount be distributed equally among the three transferee colleges.
It directed the MCI/NMC to release the bank guarantee amount to the colleges within three months.
It also directed the Supreme Court Registry to disburse the amount deposited before the Court.
The Registry will release the amount after receiving bank account details from the colleges.
Students May Face Remaining Fee Liability
The Supreme Court noted that a shortfall would still remain even after release of the secured amount.
The Court recorded that the students had originally agreed to pay higher fees at SRMCH.
However, they completed the MBBS course after paying only Government-rate fees.
The Court also noted that students had executed undertakings while receiving course-completion certificates.
Through those undertakings, they accepted that fee liability remained pending before the Supreme Court.
They also agreed to follow the final directions of the Court.
Colleges May Approach NMC For Recovery
The Supreme Court permitted the transferee colleges to submit representations before the National Medical Commission.
The colleges may give details of the remaining fee shortfall recoverable from each student.
The NMC must adjust amounts already paid by students at the time of admission to SRMCH.
The Court expressed hope that the NMC would provide proper redressal for recovery of any remaining deficit.
It also clarified that students who comply with the fee liability will receive their academic documents and course-completion certificates as per applicable regulations.
Case Details
Case Title: Soumya Ranjan Panda & Ors. v. Subhalaxmi Dash & Ors.
Court: Supreme Court of India
Bench: Justice Vikram Nath and Justice Sandeep Mehta
Judgment Authored By: Justice Sandeep Mehta
Date: May 14, 2026
Institutions Involved: Sardar Rajas Medical College, Kalinga Institute of Medical Sciences, IMS & SUM Hospital, Hi-Tech Medical College & Hospital
Regulatory Bodies: Medical Council of India, National Medical Commission
Managing Trust: Selvam Educational and Charitable Trust
